The role of consideration sets in consumer choices is attracting increasing academic and managerial attention. The basic idea is that when consumers are making purchase choices, consummers use at least a two-stage process. That is, consummers faced with a large number of brands use a simple heuristic first to screen the brands a relevant set of brands called the consideration set from the whole brand alternatives. Purchase or consumption decisions are then made from the brands in this set. Typically, choice modeling studies in marketing do not incorporate the consideration set concept explicitly. This paper proposes three models which consider the consideration set concept and tests them by predicting choice of existing brands. This study addresses three important issues in the study of choice modeling. First, it shows several ways to develop choice models which reflect the consideration set. Second, proposed models can improve choice predictions using data collected at the disaggregate level. Third, one of the proposed models (Model 3) can utilize Scanner Panel Data if the consideration function is specified precisely.
